Engagement Practice _ 44: Keep Employees in the Loop

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Few things say ‘‘you’re not important’’ more loudly than withholding information

that employees want and need to know. Keeping employees out

of the loop creates disconnection, alienation, and disengagement. On the

other hand, companies that feed their employees a steady diet of vital information

about the company build ownership and commitment.

Most employers are familiar with the story of Springfield Remanufacturing

Company’s success with ‘‘open book management.’’ After many

frustrating years of working at a company where information was hoarded

at the top, Jack Stack started Springfield Remanufacturing Company and

founded it on a key practice— opening up the company’s operations data

and financial information and teaching his workers to understand it,

thereby empowering them to make decisions based on it. Stack also gave

each employee a financial stake in the game, which increased their sense of

ownership in the business. The company’s annual sales grew from $16

million to $83 million in just nine years, and Stack’s book, The Great Game

of Business, attracted such widespread interest that dozens of companies,

such as Federal Express, Allstate Insurance, Exxon, The Body Shop, and

Hostess Frito-Lay have adapted Stack’s ideas to their own businesses.

One reason more companies have not adopted Stack’s approach is their

fear that giving information to employees would mean giving up their

power. The thinking goes that ‘‘they wouldn’t know what to do with it,’’

or ‘‘they don’t need to know,’’ or ‘‘they will be overwhelmed with all this

information,’’ but too often underlying such statements is the assumption

that employees are powerless children, too immature to be trusted with

important information. The executive who hoards information may feel

more privileged, important, and powerful, but the effect on the workplace

is a negative one.

In the absence of information, employees fill the void with rumor born

of anxiety. As rumors spread, productivity goes down and distrust goes up.

Just the opposite occurs when the company decides to share information,

often because the information it shares also happens to be important in

achieving the company’s goals. Cisco Systems openly reports all the bugs

in its products on a public Web page as soon as any problem is reported.

Rather than diminishing customer confidence in their products, this reporting

builds trust and allows programmers to quickly correct the problem.

Cisco’s CEO, John Chambers, one of the most admired executives in

American business, gives a Web-cast management update every few weeks

during which he responds directly to employee questions. Chambers wants

his employees to learn about company news firsthand, not in the media.22

Here are some ways to keep employees in the loop:

Openly discuss the company’s strategic plan and what it means to

each department and employee.

Share articles that you read about the company, industry trends, and

competitors.

Give briefings about upcoming events that may impact employees’

career options.

Share information as soon as you possibly can to nip rumors in the

bud.

Share information face-to-face when possible.

There will be times when information is confidential, proprietary, or

otherwise sensitive, and you will not be able to share it. Those times

will be the exception, however, not the rule.

One final reminder, the more valuable and productive the employees,

the more they want to be kept in the loop.